IC24: Should we have a climate value added tax?

Show notes

Today, we pick up a topic recommendation from a listener: a carbon value added tax. This tax aims to encourage environmentally friendly consumer behaviors while generating financial flows for sustainable transitions. We unpack arguments for and against this policy, and explore its potential impact on society and the economy, e.g., recent studies have found significant benefits from a meat VAT for human health, societies’ economies, and the climate. Consumer-facing tax can be uncomfortable projects for politicians, and we ask what role that can play.

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Sources

• University of Copenhagen: VAT adjustments could save 170,000 lives a year in Europe. 27 February 2025 (https://news.ku.dk/all_news/2025/02/vat-adjustments-could-save-170000-lives-a-year-in-europe/))
• Reanos et al. (2025). Green fiscal policies to reduce the environmental impact of consumption through a non-regressive carbon tax (https://www.sciencedirect.com/science/article/abs/pii/S0313592625003741))
• The Guardian / Jonathan Watts: ‘Meat tax’ could have significant impact on environmental footprint, study finds. 20 Jan 2026. (https://www.theguardian.com/environment/2026/jan/20/meat-tax-vat-environmental-footprint-eu-study))
• Springmann et al. (2026). A reform of value-added taxes on foods can have health, environmental and economic benefits in Europe. (https://www.nature.com/articles/s43016-024-01097-5))